Abstract
This chapter summarizes the theoretical and empirical literature on the ethics of tax evasion and then proceeds to examine the opinions of 1,483 Brazilians on the issue using the data from the most recent World Values Survey. The study finds that although Brazilians are strongly opposed to tax evasion in general their opposition is less than absolute in many cases. An examination of some demographic variables highlights some of these cases.
TopLiterature Review
Adams (1982, 1993) published two historical studies on tax evasion covering a period of more than 2,000 years. Cebula and Saadatmand (2005) and others (e.g., Gottfredson & Hirschi, 1990; Groenland & van Veldhoven, 1983; Jackson & Milliron, 1986; Lewis et al., 2009; McGee, 2004, 2012a; Schols & Lubell, 1998; Song & Yarbrough, 1978; Torgler, 2007; Wallschutzky, 1984) examined the reasons for tax evasion. Allingham and Sandmo (1972) and Yitzhaki (1974) developed an economic deterrence model. The common thread running through these studies is that people evade taxes because they can or because they believe the government is not entitled to the money.
Studies of Armenia (McGee, 1999; McGee & Maranjyan, 2006, 2008) found that people evaded taxes because the mechanism for collecting taxes was inadequate and because people did not believe the government was worthy of receiving a portion of their hard-earned income. This view is common in former Soviet republics and in the former communist bloc countries of Central and Eastern Europe (McGee, 2012a). Studies of Armenia (McGee, 1999; McGee & Maranjyan, 2006, 2008), Bulgaria (Smatrakalev, 2012), Bosnia & Herzegovina (McGee, Basic & Tyler, 2008, 2009), Estonia (McGee, Alver & Alver, 2008, 2012), Poland (McGee & Bernal, 2006), Romania (McGee, 2006b; McGee, Basic & Tyler, 2008), Russia (Vaguine, 1998), Slovakia (McGee & Tusan, 2008) and Ukraine (Nasadyuk & McGee, 2007, 2008) support this position, and it is likely to be the position held in other countries as well. People are less likely to evade taxes if the potential punishment is severe, or if the probability of getting caught is high (Cebula, 2001; Kaplan & Reckers, 1985; Kirchler & Maciejovsky, 2001; Torgler, 2012), although, in the past, some people have evaded taxes even if the penalty is death (Adams, 1982, 1993).
Key Terms in this Chapter
Demographic Variables: Attributes of a human population that are studied statistically. For example, in the present study, gender, age, etc., are studied to determine whether attitudes toward bribery vary based on gender or age.
Brazil: The largest country in South America, in terms of area and population. The main language is Portuguese.
Latin America: Refers to the countries in North, South and Central America and the Caribbean where Spanish or Portuguese is the predominant language.
World Values Survey: Six World Values Surveys have been conducted since the early 1980s. These surveys consist of hundreds of questions and are conducted by social scientists all over the world. Some surveys have included 200,000 participants from more than 80 countries.
Longitudinal Study: A study comparing attitudes over time.
Tax Evasion: The illegal nonpayment of taxes; distinguished from tax avoidance, which is the legal nonpayment or minimization of taxes.
Ethics: Moral principles that govern behavior.
Religiosity: Attitude toward religion.